An Economic Handover in Afghanistan

03/29/2011 06:39 pm ETUpdated
May 29, 2011

Afghanistan's economic and security futures are intertwined; neither will be secure without the other. After ten years of NATO engagement in Afghanistan, President Karzai recently announced a military milestone: Afghan army and police are to take full responsibility for security in several regions of Afghanistan including Kabul, several cities in the North, and Lashkar Gah in the contentious Helmand province. As we watch this handover begin, we should also encourage a similar transition within the economic development sphere. The key to establishing long-term stability in Afghanistan lies in the country's ability to create a business environment that provides jobs, income, and sustainable economic growth for its people.

Afghanistan's small businessmen and traders are a dynamic segment of the growing economy. Despite the hardships they face each day, they remain optimistic about their future and the role they can play in rebuilding Afghanistan's economy. When policy debates over the country's economic future occur, they are often held within the halls of government ministries and donor offices. Yet, the voices of those closest to the on-the-ground realities of operating a business in Afghanistan are seldom, if ever, heard. Economic reform experience has taught us that while big picture reforms and infrastructure projects are important in creating the institutions of a market, small scale adjustments to policy most often affect the operations of entrepreneurs in the short term. The voices of those entrepreneurs need to be included in the policy debate.

Simply put, Afghans need to be in greater control of the economic decision making facing their country, and the Afghan business community's new National Business Agenda (NBA) helps build a framework for this to happen. At a roll-out event for the NBA this week, Afghanistan's Chamber of Commerce and Industry and a coalition of 10 other leading business groups representing the country's small producers and service providers presented their ideas and recommendations for Afghanistan. The NBA is not just another ambitious economic development strategy; instead, it is a clarion call for the Afghan government to pay heed to the most pressing issues facing the business community today, and to the simple policy changes that can immediately improve profitability, increase tax collection, and create much needed jobs.

Appropriately for a document that represents the needs of grassroots entrepreneurs, the NBA process was an example of participatory democracy in action and took place in open and transparent sessions. Over 1,300 business people from five regions across Afghanistan participated in roundtables and sector working groups to identify their most urgent business challenges and potential solutions. These were then refined into the concrete proposals represented in the Agenda.

Many of the challenges faced by Afghan entrepreneurs are similar in nature to their counterparts around the world. Like our small business owners in the United States, Afghan business owners face everyday challenges such as access to credit, onerous taxes, and burdensome regulation. However, they also have problems unique to the Afghan business environment: local governments engage in price-fixing despite constitutional prohibitions, good land is difficult to come by due to corruption and squatting, and women entrepreneurs require access to business parks in this segregated society.

Not all of these problems can be solved at once, and not all can be solved by the Afghan government alone. International donor funding and expertise are an integral part of Afghanistan's development, and these NBA recommendations should help shape future development interventions and programming.

If Afghanistan is to assume control of its security environment in the short to medium term, its economic policies must encourage fast growth within the same time period. The National Business Agenda -- written by the Afghans business leaders who know their country best -- provides a solid foundation on which the Afghan people can build a resilient and sustainable economic future.